Econ 2305 Ch.1
Econ 2305 Ch.1 ECON 2305
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This 6 page Class Notes was uploaded by JenJen Notetaker on Saturday February 6, 2016. The Class Notes belongs to ECON 2305 at University of Texas at Arlington taught by Jane Himarios in Winter 2016. Since its upload, it has received 326 views. For similar materials see Principles of Macroeconoomics in Economcs at University of Texas at Arlington.
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Date Created: 02/06/16
1. Production efficiency: A. is an assumption used by economists that holds important variables constant. B. reflects how often economists make assumptions about important variables. C. reflects how well resources are allocated. D. reflects the fact that all labor is equally productive. 2. When goods are produced at the lowest possible cost, an economy is said to have achieved: A. allocative efficiency. B. production efficiency. C. cheap production. D. inferior quality goods. 3. Heather has one employee in her sweater shop who can sew six sweaters a day. When she hires a second person, the two employees can make 10 sweaters together. As it relates to thinking at the margin, the extra benefit received from hiring a second worker is: A. six sweaters. B. 16 sweaters. C. 10 sweaters. D. four sweaters 4. Which of the following is a microeconomic topic? A. the U.S. rate of growth in GDP for the first quarter in 2010 B. the price of an iPad sold by Apple C. the U.S. inflation rate in 2009 D. the U.S. unemployment rate in March 2010 5. Ceteris paribus means: A. everything is held constant. B. other things being equal. C. nothing changes. D. everything changes. 6. Tax policy is partly based on the notion that: A. high taxes are preferable to low taxes. B. markets never work efficiently. C. government must always run a budget surplus. D. people respond to financial incentives. 7. Which is an example of a “bad” incentive? A. rewarding students for studying and earning high grades B. offering factories tax credits for reducing pollution C. charging drivers a gasoline tax to fund green energy projects D. raising homeowners' property taxes on home improvements 8.In the study of economics, the goals of efficiency and equity are often: A. given equal emphasis. B. objectively definable. C. conflicting with one another. D. compatible. 9.Which is the BEST example of a microeconomic issue? A. whether the production of automobiles decreased last year B. whether the country's price level has increased last quarter C. whether the unemployment rate will exceed 6% this month D. whether the Federal Reserve will raise interest rate this week 10.Opportunity costs exist because: A. using resources for one activity means that their use elsewhere must be given up. B. buyers always have an opportunity to go to another seller. C. sellers are unwilling to give up their product without a price. D. there are opportunities to find ways to reduce costs. 11. Figure: Graph Interpretation Reference: Ref 17 (Figure: Graph Interpretation) In the graph, the equation for the line is: A. S = 300 + 120R. B. R = 120 – 300S. C. R = 120 – 0.4S. D. R = 120 + 0.4S. 12. Markets provide an incentive structure to: A. maximize efficiency. B.eliminate scarcity. C.maximize equity. D.maximize market information. 13. Which is TRUE about specialization and exchange between two individuals? A. They generally benefit the richer individual at the expense of the poorer individual. B. They generally benefit the poorer individual as well as the richer individual. C. They generally benefit neither the poorer individual nor the richer individual. D. They generally benefit the poorer individual at the expense of the richer individual. 14. Which of the following questions is NOT an example involving marginal analysis? A. Should a university offer another section of a class? B. Should Boeing hire another assembly-line worker? C. Should a restaurant stay open another hour? D. Should K-Mart convert all its stores to Sears stores? 15. For a nation, ______ productivity growth leads to ______ standards of living. Selected Answer: A. low; high B. high; high C. high; low D. high; unchanging 16. Economists believe that: A. data is more important to traders than information. B. information should be sold to the highest bidder. C. making information available to market participants improves the functioning of the market. D. the flow of information has minimal impact on market efficiency. 17. Opportunity costs exist because: A. there are opportunities to find ways to reduce costs. B. using resources for one activity means that their use elsewhere must be given up. C. sellers are unwilling to give up their product without a price. D. buyers always have an opportunity to go to another seller. 18. Figure: Sales and Advertising (Figure: Sales and Advertising) The graph shows the advertising expenditures and the resulting sales (in bottles) of a new caffeinated beverage called Jump. If the company that manufactures Jump spends $3,000 on advertising, how many bottles of Jump will it sell? A. 9,000 B. 13,500 C. 7,000 D. 10,000 19. Which of the following is NOT a macroeconomic issue? A. whether the unemployment rate will exceed 6% this month B. whether the production of automobiles decreased last year C. whether the country's price level has increased last quarter D. whether the Federal Reserve will raise interest rate this week 20. Employers give full-time employees that have been on the job more than three years employee stock options. This is an example of: A. people following incentives. B. thinking on the margin. C. opportunity costs. D. irrational behavior.
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